Indian firm Surat Rough Diamond Sourcing (SRDSIL) has signed a US$1.2-billion rough diamond supply deal with a group of local entrepreneurs trading as Zimbabwe Diamond Consortium.
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Under the arrangement, SRDSIL will buy a minimum of US$100-million worth of rough diamonds a month.
SRDSIL is a consortium of 1 500 Indian diamond companies based in Surat, which is considered the commercial capital of the state of Gujarat.
The deal was signed by SRDSIL chairman Ashit Mehta and his ZDC counterpart, Supa Mandiwanzira.
Empowerment Minister Saviour Kasukuwere, Mines Deputy Minister Gift Chimanikire, India's ambassador to Zimbabwe and other government officials attended the event.
A 24-member delegation of Indian diamond industry players, all members of SRDSIL, was in Harare to seal the deal.
In exchange for guaranteed sales of US$1.2-billion a year, the Indians have promised to train 1000 young Zimbabweans in designing, cutting and polishing diamonds.
The youths will be sent to India on conclusion of the first sale worth US$100-million.
The Indian company will also assist Zimbabweans in developing a strong diamond beneficiation industry.
The Indian diamond manufacturing industry accounts for 14 out of every 15 rough diamond stones cut and polished in the world.
Surat is the world centre for diamond beneficiation and is the fastest-growing city in India and second fastest in the globe, thanks to diamonds and textiles.
Experts say Zimbabwe could account for between 25 and 35% of world diamond production. Rio Tinto and a Saudi company were already mining diamonds in Zimbabwe before two other mining companies were licensed to mine alluvial fields in Marange.
Three more companies have recently been licensed and will also start mining soon, according to Mines and Mining Development Minister Obert Mpofu.
SRDSIL chairman Ashitbhai Mehta said that his organisation would lobby for Zimbabwe to be able to trade in diamonds.
Mehta pointed out that Zimbabwe's rich diamond reserves made it a steady source of rough stones. "We are confident that Zimbabwe will be able to sell its diamonds," he said.
At the recently concluded Mines to Market diamond trade conference held in Mumbai, Mpofu attracted considerable attention with his statements, calling the West "hypocritical" for its position against Zimbabwe diamonds in light of continued reports of human rights abuses in the country's diamond fields.
Mpofu called the international embargo against Zimbabwe diamonds a human rights violation and said that his country had complied with all Kimberley Process demands, adding that Zimbabwe had "nothing to fear" from the KP plenum.
The Kimberley Process (KP) approved the sale of a portion of Marange goods in August and September, much of which went to Indian buyers.
However, further sales have been withheld pending a KP review mission report to be discussed at the organisation's plenary in Jerusalem in November.
A number of KP members, in particular the US, Australia and Canada, along with the civil society component of the KP, remain opposed to sales of Marange diamonds because of concerns over human rights at the mines.
Two major European banks recently announced they would not finance any transactions involving gems from the Southern African country.
ABN Amro and the Antwerp Diamond Bank (ADB) said "reputational issues" would prevent them from funding any of their clients involved in diamond deals with Zimbabwe.
Chairman of the ADB executive committee Pierre de Bosscher said at the Mines to Market conference that the ban on Zimbabwe transactions would remain until the country is no longer blacklisted.
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